The prevalent business model is a percentage-based services pricing structure. The property management company usually charges between 7% and 10% of the monthly rent amount to provide services that include:

Collecting rents and forwarding them to the owner.

Marketing the rental property to keep it occupied.

Vetting of potential tenants, background checks, credit checks, etc.

Rental applications and lease documents.

Handling tenant relations, complaints and requests.

Ordering and supervising repair and maintenance to the property.

Paying vendors and service companies.

Enforcing late rent payment penalties and handling evictions if necessary.

Financial reporting to the owner(s).

Big Dog Property Management has introduced a different services pricing model that assumes the normal duties of the management company but does so with a flat fee property management pricing structure. Rather than a percentage of rent, the fee is $95/month, regardless of the monthly property rental amount. This business model appeals to rental property owners, as it places a ceiling on their costs without increasing fees for properties with higher rents.

Using an example 8% management fee structure, a property renting for $2,000/month would be charged a monthly management fee of $160. The $65/month saved with the $95 fee represents an additional 3.25% return on investment for this example property. Upscale properties do not pay higher prices for services that do not significantly increase in difficulty or intensity just due to the rent charged.

As is common in the industry, the company charges an initial lease fee as a percentage of one month’s lease amount. However, other owner costs in their fee package are not as widely practiced in the normal property management business model.

No late fee split – a common practice is for the management company to take some portion of late fees collected. Big Dog Property Management remits 100% of late fees to the property owner.

Startup or marketing fees – unlike some management firms, there are no extra startup or marketing fees charged when a new client’s property is placed into rental service.

No annual contract – it is common practice to require a one-year contract with property owners. This company’s contract is for 90 days, reverting to month-to-month after that.

No maintenance markup – another commonly added fee is a markup of 10% to 15% on maintenance and repair services on the property. This is not in the Big Dog Property Management fee structure.

Experience and client feedback in property management since 2009 evolved to indicate greater investor sophistication and expectations. Changing investor requirements began to emerge after the mortgage and housing crash in 2006. Real estate rental property investors became more restrictive in their due diligence before buying properties.

Big Dog Property Management developed this fee package in response to investor scrutiny of management costs as they influence ROI, Return On Investment. Property owners want all of the services they’ve enjoyed in the past, but they want them delivered in a more ROI-friendly fee structure.